Profile picture for annika23

difference between single borrower and co-borrower with no income

My husband and are in the process of refinancing from a 30 to a 15 with our existing lender on a HARP streamline refi. My husband makes 100% of the income in our family. I have a consulting business that has been losing money for two years that I intend on closing. He makes 190K a year and I make 0. The refi doesn't verify income which for us is a bad thing as it is our strongest plus as borrowers. 1. Would it be easier to have him be the only borrower even if we originally were on the first loan together? 2.  Is it too late if we are just now getting the paperwork to fill out to change the status from borrower/coborrower to single borrower and spouse.

  • December 14 2011 - US
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Answers (5)

Annika,

In the case of a streamline refinance often times the original borrowers need to remain on the new loan as well. with some exceptions. There is no benefit to remove you because as you stated the income is not being verified. so the only other factor would be credit scores.  As someone else mentioned a lower score could result in higher interest rate.  Kudos to you for making the smart decision to reduce your loan term to 15 years.  your saving a tremendous amount of interest!! 
  • December 14 2011
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Profile picture for annika23
So I have a slightly higher credit score by a tiny margin, we are both around 740. I had a solid salaried position when the mortgage was written in 2006, however, I now an self employed. I just don't want our loan process drawn out due to not being able to reliably validate my income. My bhusband has more than enough on his own. His current income alone is higher than our combined in 2006. If it is HARP requirement, I can leave it as is.
  • December 14 2011
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It would be best for your credit scores to be similar. If you are on the loan with no income, and happen to have a lower credit score, I believe it could cost you some pricing advantage. Do you know both of your scores?
  • December 14 2011
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Profile picture for Mortgage Brothers
It doesn't matter if your income is zero or a negative number from tax returns as long as debt ratios work on his income.  No reason to remove you as a borrower. 
  • December 14 2011
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Profile picture for sunnyview
I would definitely ask a lender, but I had thought that for HARP the contract had to be unchanged from the original except for the lower interest rate or term if the borrower wanted a shorter term. As long as you meet the qualifications for HARP as is, I would probably leave the paperwork alone.
  • December 14 2011
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